The Power of Convergence

CHAPTER 4The Nimble Giants: How Converged Business Models Drive Successful Large Enterprises

BLOCKBUSTER DIDN’T CREATE the video rental market. By the time Blockbuster emerged in 1985, tens of thousands of video rental clubs and stores dotted strip malls across the country. But the early video rental business was immature and its model expensive. Video stores would charge “membership dues” and exorbitant late return fees to cover their high expense for buying tapes through movie distributors. Blockbuster was different because it made video rentals easy and affordable. It didn’t charge membership fees, which lowered the barrier to consumers. But what really made Blockbuster different was the change it brought to the video rental model. Rather ...